No Beating Around the Bush: TTAB Upholds Anti-Pot Policy

The Trademark Trial and Appeals Board denied an application to register a trademark for essential oil dispensers meant to fill smoking devices with cannabis-based oils. Scott Hervey and Tara Sattler talk about this case on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

Show notes:

Scott:
On May 3, the TTAB issued a precedential opinion denying an application to register a line of essential oil dispensers used to dispense premeasured amounts of cannabis-based oil to a vaping or smoking device for ‘dabbing on the grounds that such products are illegal under the Federal Controlled Substances Act. It’s been known since the legalization of medical cannabis that it’s impossible to get a federal trademark. However, here the Applicant argues that an exemption under the Controlled Substances Act makes these goods lawful under federal law and thus eligible for federal trademark registration. We are going to talk about this case next on the briefing by Weintraub Tobin.

Scott:
National Concessions Group, Inc sought to register the mark BAKKED and a stylized drop design mark for an essential oil dispenser. The trademark examiner assigned to the application contended that this oil dispenser is drug paraphernalia, used in dabbing, and is illegal under the CSA, and refused registration on that basis. Even though the Applicant argued that the goods were intended for and could be used for legal purposes, the examiner looked at extrinsic evidence, including NCG’s website and advertisements for the products, which supported the examiner’s position that the goods were primarily intended for use with cannabis.

Tara:
Under Section 1 of the Lanham Act (15 USC 1051),  the owner of a trademark used in commerce may request registration of its trademark on the principal register. Section 45 of the Lanham Act (15 USC 1127), “commerce” means all commerce that may lawfully be regulated by Congress. If the record indicates that the mark or the identified goods or services are unlawful, actual lawful use in commerce is not possible, and a refusal under Trademark Act Sections 1 and 45 is appropriate.   Where the identified goods are illegal under federal law, including the federal Controlled Substances Act (CSA), the Applicant cannot use its mark in lawful commerce.

Scott:
Section 863(a) of the CSA makes it unlawful to (1) sell or offer for sale drug paraphernalia. Drug paraphernalia is defined as “any equipment, which is primarily intended or designed for use in introducing into the human body a controlled substance. Marijuana and marijuana-based preparations are controlled substances under the CSA. The denial of a cannabis-related application under the CSA is not new to trademark practitioners. What makes this case interesting is NCG’s argument that two exceptions in the CSA supported registration.

Tara:
However, the CSA includes two exceptions to section 863. They state that section 863 shall not apply to any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items. And the Applicant argued that its goods qualified for an exemption because the Applicant is “authorized by” Colorado state law to “manufacture, possess, or distribute” such goods,

Scott:
This argument was a matter of first impression for the board. That doesn’t happen very often, and while it usually means that the TTAB will address and resolve the matter, in this case, the TTAB said that they do not need to decide the merits of the Applicant’s argument. The TTAB said that even if the Applicant’s interpretation of the exemption is correct, it is not entitled to the registration it seeks.

Tara:
First, the Applicant’s application was not geographically limited to Colorado. A federal registration would give Applicant presumptive exclusive nationwide rights to its mark in association with the identified goods.

Scott:
Second, the Applicant’s goods are not legal in other states outside of Colorado. Any authorization by Colorado of Applicant’s manufacture, possession, or distribution of the goods cannot override the laws of the other states or federal law outside Colorado. So, despite some, it’s still the status quo.